Correlation Between Vinda International and Estee Lauder
Can any of the company-specific risk be diversified away by investing in both Vinda International and Estee Lauder at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vinda International and Estee Lauder into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vinda International Holdings and Estee Lauder Companies, you can compare the effects of market volatilities on Vinda International and Estee Lauder and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vinda International with a short position of Estee Lauder. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vinda International and Estee Lauder.
Diversification Opportunities for Vinda International and Estee Lauder
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Vinda and Estee is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Vinda International Holdings and Estee Lauder Companies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Estee Lauder Companies and Vinda International is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vinda International Holdings are associated (or correlated) with Estee Lauder. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Estee Lauder Companies has no effect on the direction of Vinda International i.e., Vinda International and Estee Lauder go up and down completely randomly.
Pair Corralation between Vinda International and Estee Lauder
Assuming the 90 days horizon Vinda International Holdings is expected to generate 0.61 times more return on investment than Estee Lauder. However, Vinda International Holdings is 1.64 times less risky than Estee Lauder. It trades about 0.01 of its potential returns per unit of risk. Estee Lauder Companies is currently generating about -0.08 per unit of risk. If you would invest 2,162 in Vinda International Holdings on September 3, 2024 and sell it today you would earn a total of 5.00 from holding Vinda International Holdings or generate 0.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 88.08% |
| Values | Daily Returns |
Vinda International Holdings vs. Estee Lauder Companies
Performance |
| Timeline |
| Vinda International |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Estee Lauder Companies |
Vinda International and Estee Lauder Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vinda International and Estee Lauder
The main advantage of trading using opposite Vinda International and Estee Lauder positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vinda International position performs unexpectedly, Estee Lauder can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Estee Lauder will offset losses from the drop in Estee Lauder's long position.| Vinda International vs. Hengan International Group | Vinda International vs. Henkel AG Co | Vinda International vs. LOral SA | Vinda International vs. Church Dwight |
| Estee Lauder vs. Honest Company | Estee Lauder vs. Hims Hers Health | Estee Lauder vs. Procter Gamble | Estee Lauder vs. Coty Inc |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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